MRC Global Inc. reported an 8% year-over-year decline in revenue for the first quarter of 2025, as the distributor faced headwinds from the completion of major 2024 infrastructure projects.
First-quarter sales totaled $712 million, down from $777 million in the same period last year, but rose 7% sequentially from the fourth quarter of 2024. The company pointed to growing order activity and improving visibility of near-term deliveries as signs that business conditions are strengthening heading into Q2.
Net income from continuing operations was $8 million in the quarter, down 60% from $20 million in Q1 of the prior year.
Rob Saltiel, MRC Global’s president and CEO, said the company entered the second quarter with solid momentum and a growing backlog, which increased 13% over year-end levels. “Our business has continued to perform well into the second quarter,” Saltiel said. “With strong intake levels and improving visibility on near-term project deliveries, we expect second-quarter revenues to grow sequentially by a high-single to low-double-digit percentage.” Saltiel also confirmed that MRC began executing a share buyback program in Q2, taking advantage of recent stock market volatility to return capital to shareholders.
MRC’s performance varied widely across end-markets and geographies. Sales in the gas utilities segment, which represents 38% of total revenue and is primarily U.S.-based, rose 3% year over year to $273 million, as customers returned to more typical buying patterns and ramped up capital spending for the construction season. Sequentially, this segment posted 8% growth. In contrast, sales in the downstream, industrial and energy transition (DIET) segment declined 18% to $220 million, reflecting project timing issues in both U.S. and international markets. The DIET segment saw a 6% sequential gain, supported by U.S.-based chemical and refining activity.
The production and transmission infrastructure (PTI) segment posted $219 million in sales; an 11% year-over-year decline due to the wind-down of several large U.S. midstream projects completed in 2024. On a sequential basis, PTI sales rose 8%, benefiting from new pipeline project activity in the U.S. and the North Sea.
Regionally, U.S. sales dropped 11% year over year to $591 million. Gas utilities was the lone bright spot in the U.S., up 3% year over year and 8% sequentially. International sales rose 10% year over year to $121 million.
MRC reported a $30 million net loss from discontinued operations related to the sale of its Canadian business, which closed March 14. Including that charge, the company posted a total net loss attributable to common stockholders of $22 million, or ($0.26) per diluted share. This compares to net income of $13 million, or $0.15 per share, in the first quarter of 2024.
Despite these earnings challenges, MRC’s backlog climbed to $603 million at the end of March, an 8% increase from the previous quarter. Management highlighted this growth as a key indicator of improved customer demand across all sectors.
The company ended the quarter with $63 million in cash and $308 million in net debt, resulting in a net debt leverage ratio of 1.7x. Total available liquidity stood at $570 million.
The analyst’s sentiment was mixed. While acknowledging the year-over-year revenue and margin compression, some analysts pointed to the sequential growth, backlog gains, and cash flow generation as positives. “The downturn in PTI and DIET was expected given tough comps from last year, but Gas Utilities held up well,” said Barclays analyst Marcus Holt. “The near-term focus will be on whether the improving order trends convert to stronger margins.
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